Q2FY23 Preview: Reliance Industries: Profit After Tax seen at Rs146,831 million

20 Oct 2022 , 07:48 AM

Result date: 21^st October, 2022
Recommendation: Buy
Target price: Rs2,873

Reliance Industries (RIL) is witnessing good traction in its B2C businesses (retail and Jio). However, analysts at IIFL Capital Services believe the O2C business is set to register one of the worst quarters, as GRMs collapse, and petrochemical demand remains soft. Rupee depreciation coupled with rising yields also should be an overhang.

While the E&P business should remain strong, its contribution remains low. In Retail, analysts at IIFL Capital Services expect 36% sales growth over the year-ago quarter and 7.5% core margins. Analysts at IIFL Capital Services forecast 10% sequential growth for RIL’s telecom business.

While the stock trades well below its SoTP of Rs2,873/share, there is no meaningful trigger to reverse its underperformance versus the broader markets, believe analysts at IIFL Capital Services.

Important management insights to watch out for:

• Outlook on O2C business
• Growth, margin trends in consumer businesses

Rs. Million	September 2022 estimates	YoY change	QoQ change
Profit After Tax	146,831	7%	(18)%

Source: Company, IIFL Research